Question
P6.12 The Inviting Inn has 500 available guest rooms. For a certain week next month, the anticipated transient demand for rooms is as follows. Monday
P6.12 The Inviting Inn has 500 available guest rooms. For a certain week next month, the anticipated transient demand for rooms is as follows.
Monday 200
Tuesday 200
Wednesday 200
Thursday 200
Friday 100
Saturday 50
Sunday 50
The Inviting Inn also has committed the following number of rooms for group sales during the same week:
Monday 200
Tuesday 200
Wednesday 300
Thursday 300
Friday 100
Saturday 100
Sunday 100
The Inn has the possibility of booking another of 100 rooms for the night of Tuesday, Wednesday,Thursday and Friday of that week at a discounted rate of $60 per room. The inn's rack rate for transient guests is $80, and it marginal cost per room sold is $15.
a. Assuming the new group is booked, calculate the additional net sales revenue gross sales revenue less marginal costs, to the inn.
b. What factors, other than net sales revenue, might you consider before committing to this new group sale.
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